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As Kit Malthouse reinforces the government commitment to turning “generation rent into generation own”, new stats show what ownership means for the money.
The Housing Minister repeated the commitment in the Commons on Tuesday (April 11), as MoneySuperMarket floated figures that equated to buyers officially entering into a mortgage owning only he equivalent of an average-sized kitchen and bathroom.
Rachel Wait, consumer affairs spokesperson at MoneySuperMarket, offered an alternative to the Malthouse mantra.
“It’s increasingly difficult to get on the property ladder, yet we don’t tend to think about what that means in terms of how much of your home you actually own after you’ve spent the time saving for a deposit and going through the buying process,” she said.
The study by the price comparison website looked into how much of the average home gets “bought” over the course of the mortgage, with only 33% of a house officially owned by the buyer when they complete on the purchase of the property.
With each square metre of a UK property costing an average of £3,248.16, the findings showed that the master bedroom costs £43,400, roughly £3,000 more than the kitchen, with the living room the most valuable space, at £55,500.
A breakdown of regional variations revealed those buying in Leeds will typically own 41% of the property after five years (master bedroom, kitchen and half of living room), compared to 61% per cent in Edinburgh (master bedroom, kitchen and the entire living room).
In London, buyers will own just under half of their property after five years (47%) amounting to a master bedroom, a second bedroom and a bathroom.
The data also brings into focus the north versus south divide when it comes to the cost of property.
After paying off a mortgage for five years in Plymouth, home owners would have paid off 44% of the property – or the equivalent of £95,429.25.
However, in Newcastle, paying off the same proportion of the property over five years would have cost over £10,000 less, coming in at £82,579 on average.
Wait acknowledged that the study “obviously” doesn’t mean that new homeowners are restricted to half a kitchen until they’ve paid off enough of their mortgage.
“(But) it does raise some interesting questions about the increasing cost of properties and how much you end up paying for a property of the same size, depending on which part of the country you’re living in.
“As always, it’s worth shopping around when taking out a mortgage to ensure you’re getting the best deal possible, and making sure payments are made on time so you don’t face costly late payment fees,” she said.
